One of the reasons many people are reluctant to file for bankruptcy is the fear that it will ruin their reputations and make it difficult to get a job or rent an apartment in the future. While most of people’s fears about bankruptcy are unfounded, there is some reason for concern when it comes to post-bankruptcy discrimination.
There are laws in place that protect you from post-bankruptcy discrimination, but how much protection you get depends on whether the entity is public or private. Local, state, and federal government agencies are prohibited from denying, revoking, suspending, or refusing to renew a permit, license, franchise, charter, or similar grant based on the fact that you’ve filed for bankruptcy. They are also not allowed to terminate or deny you any public benefits, evict you from or deny you public housing, refuse to renew your state liquor license, exclude you from participating in a home mortgage finance program, withhold your college transcript, exclude you from a government-guaranteed student loan program, or deny you a government contract based on your bankruptcy.
Unfortunately, the private sector doesn’t have as many safeguards for those who sought debt relief through bankruptcy. Private employers cannot fire you or take any action against you for a bankruptcy, but a potential employer can choose not to hire you based on your credit history. Likewise, a potential landlord can refuse to rent to you if you have a bankruptcy on your record; however, many landlords prefer a renter who has undergone a bankruptcy to one who is struggling under a mountain of debt. Similarly, bankruptcy can be an advantage when applying for jobs that require security clearance, such as with a government agency like the FBI or the CIA. This is because employees with financial problems are at a higher risk for bribery and blackmail.
Bankruptcy is a very useful tool for getting your financial house in order. But it is not for everyone, as everyone’s situation is different. To find out if bankruptcy is the right choice for your situation, you’ll want to discuss it with an experienced bankruptcy attorney. The legal team at the Los Angeles offices of the Nader Law Firm has been helping Southern California residents get out of debt for over 25 years. Call today for a free consultation at (818) 446-1334.